Jobs Report: Unemployment Ticks Down; Payrolls Tick Up

I'm Renee Montagne. And this morning brought another surprisingly weak jobs report. The government says the U.S. economy added just 113,000 jobs in January. That follows just 75,000 jobs in December. Those numbers are way below the average monthly job creation for most of 2013 and it has lots of people worried the economy may be losing steam. NPR's John Ydstie joins us again to talk about it. Good morning.

JOHN YDSTIE, BYLINE: Hi, Renee.

MONTAGNE: So is this in fact another sign the economy is slowing down?

YDSTIE: Well, some economists are coming to that conclusion, and one reason is that last year employers were adding almost 200,000 jobs each month, but in the past two months we're averaging just half that. But Labor Department did say weather played a big role in suppressing job creation in December and was a small factor in January. But also the government employment - federal, state and local - dropped by almost 30,000 in January. Bit of a surprise, because recent months have showed government employment stabilizing after the big cuts during the recession.

MONTAGNE: Well, despite the weak job growth, we had a drop in unemployment, so that's interesting, that rate. Why? They seem to be the opposite?

YDSTIE: Yeah, well, it's because the two numbers come from two different surveys, one of businesses and the other of households. And they often tell us different stories. In January the household survey, which produces the unemployment rate, tells us far more people got jobs, more than 600,000. And that pushed the unemployment rate down a tenth of a percent. The household survey also showed more people looking for work, another positive sign.

But that survey is much smaller and has wider swings than the survey of businesses that gave us that weak headline job creation number. So economists put more stock in what businesses tell us and their slow hiring suggests the economy is slowing.

MONTAGNE: If, John, the economy is slowing, what would be causing that?

YDSTIE: Well, we've seen some disappointing signs that manufacturing might be losing steam. One issue, that businesses have built up big inventories late last year, and consumer demand just wasn't strong enough to clear the goods off the shelves, so that suggests less manufacturing activity early in this year. And also there's signs that China, big export market, is slowing. And worry about currency problems in some emerging markets like Turkey and Argentina, and that's got investors pulling money out of those countries. And in the past couple of years, China and emerging market countries have been helping out global growth and now there's concern they could be a drag on the global economy.

MONTAGNE: So is this disappointing job growth number going to force the Federal Reserve to reconsider its decision, much talked about, to wind down its big stimulus program?

YDSTIE: Well, we do have a new leader at the Fed. Janet Yellen took over from Ben Bernanke at the beginning of this week, but they are very close in their view of what the Fed should be doing. So I don't expect a change. I think Fed policy makers are beginning to doubt that their big bond-buying stimulus program is having much positive effect and that the risks now outweigh the benefits. So I would expect the Fed to continue dialing back its stimulus.